Background: Collaborative care is an effective treatment for the management of depression but evidence on its cost-effectiveness in the UK is lacking. Aims: To assess the cost-effectiveness of collaborative care in a UK primary care setting. Methods: An economic evaluation alongside a multi-centre cluster randomised controlled trial comparing collaborative care with usual primary care for adults with depression (n = 581). Costs, quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratios (ICER) were calculated over a 12-month follow-up, from the perspective of the UK National Health Service and Personal Social Services (i.e. Third Party Payer). Sensitivity analyses are reported, and uncertainty is presented using the cost-effectiveness acceptability curve (CEAC) and the cost-effectiveness plane. Results: The collaborative care intervention had a mean cost of £272.50 per participant. Health and social care service use, excluding collaborative care, indicated a similar profile of resource use between collaborative care and usual care participants. Collaborative care offered a mean incremental gain of 0.02 (95% CI: –0.02, 0.06) quality-adjusted life-years over 12 months, at a mean incremental cost of £270.72 (95% CI: –202.98, 886.04), and resulted in an estimated mean cost per QALY of £14,248. Where costs associated with informal care are considered in sensitivity analyses collaborative care is expected to be less costly and more effective, thereby dominating treatment as usual. Conclusion: Collaborative care offers health gains at a relatively low cost, and is cost-effective compared with usual care against a decision-maker willingness to pay threshold of £20,000 per QALY gained. Results here support the commissioning of collaborative care in a UK primary care setting.